How Does A Shortsale Work?
Real estate is one of the best ways to boost wealth. In fact, experts peg real estate as a top way to invest. And short sales can be a good way to grab cash and sell real estate.
But not everyone knows the ins and outs of a short sale.
How does a short sale work? We’ve picked out the must-knows surrounding this real estate method. Read on for a guide to short sales. If you have a house in longmont that you need to sell fast go here.
What is a Short Sale?
Short sales happen when someone sells property for a lower amount than is owed on a mortgage. This often is an option when the person selling the property is “underwater.” That means they owe more than their home’s worth.
Usually, a bank will allow a short sale to recover some portion of the mortgage they lent out. This became a popular option among homeowners who saw a market downturnduring the Great Recession.
How Does a Short Sale Work?
Many homeowners and people in the real estate world have the same question. How does a short sale work?
Short sales usually start when a homeowner sees his or her property drop quickly in value. But the whole short sale process can’t start until the mortgage-holder agrees to the sale. If that lender is a bank, they usually also need an explanation of why the transaction is a good deal.
Once the sale is approved, the buyer has to go through a few steps. First, the buyer should make a deal with the homeowner. Next, that buyer will need to go to the lender or bank for the go-ahead.
It’s always smart to look at the specific deal with a close eye before deciding to do a short sale. But there are several benefits to a short sale for sellers:
It Can Save Credit
A short sale is usually an option that’s weighed against a foreclosure. And it can be much better on a person’s credit than foreclosing on a home. Credit scorers tend to penalize a person’s credit score significantly more when there’s a foreclosure.
That means short sales can help give homeowners a better shot at buying a home later on.
It Can Be a Relief
Buying a home is usually a big investment for a person. And foreclosure can be seen as a financial disaster.
Short sales let a person sell their home and move on.
It Comes with Some Built-in Savings
During a traditional home sale, the seller needs to pay for associated fees. That means things like real estate agent commissions.
But they don’t need to worry about these charges when it comes to a short sale. That’s because the bank or lender is usually responsible for paying those fees during the process.
More in Selling a Home
This guide should answer the question, “How does a short sale work?” But selling a home can still be a tricky process. And we’re here to help.
Interested in the house selling process? Check out our how-to section here to learn how we can make the house selling process simple and easy.